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HOUSTON and LONDON (March 12, 2008) — Although an increasing number of business process outsourcing (BPO) decision makers understand the critical role Information Technology (IT) plays in BPO success, many continue to struggle to determine how to tangibly act on this knowledge when undertaking a BPO effort, according to the results of a just-completed EquaTerra market study.  The study also found that buyers in the Americas and Europe are still uncertain about how to actually account for IT solution options in the BPO sourcing and solution design process.

These are the overarching findings from EquaTerra’s third annual “Assessing the Role of IT in BPO Success” market study.   Respondents to the 2008 survey included more than 250 BPO decision makers in North America and Western Europe.   All respondents were responsible for HR, finance and accounting, or procurement BPO decision making in organizations with minimum $/£/€100 million in revenue operating across all major industry groups.

Additional key findings from the 2008 market study include:

Perceived importance of the BPO service provider’s IT solution to BPO success

• The average score given to the importance of the BPO provider’s IT solution was 4.36, up 17 percent from the 2007 edition of the study
• 88 percent of 2008 study respondents cited the provider’s IT solution as being somewhat or very important to BPO success

 Most critical attributes of BPO service providers’ IT solutions

• Flexibility to adopt to buyer process specificities
• Cost-efficiency, so the provider can pass on additional savings to the buyer
• Ease of use for end-users (e.g., via self-service tools, strong reporting)           

           
Top enterprise software preferences in BPO

• Buyer preferences for IT solutions in BPO: While the majority of buyers are open to considering BPO service providers with different IT solutions, they have clear IT solution preferences
• Buyer preference for enterprise software solutions: When entering into BPO efforts, most buyers prefer to continue using the same commercial enterprise software solutions they currently have in place

Said Stan Lepeak, EquaTerra’s Managing Director of Research, “Although IT is linked to business process performance, EquaTerra consistently finds the IT topic, and often the buyer’s IT group, under-represented in the BPO process.  As a result, poor planning around IT needs and issues in BPO frequently becomes a common root cause of BPO problems.”

Similar to prior years of this assessment, the internal IT group was the lead source of advice on IT issues in BPO processes, cited by just over half of the respondents.  However, while 75 percent of U.S. respondents identified the IT group as a key source of advice, only 31 percent of European respondents did so.  In the 2007 survey, 63 percent of U.S. respondents cited the IT group as a source of advice, compared to 44 percent in Europe.

While these rankings overall are positive, they still show that a relatively large number of the BPO buyers do not meaningfully include their IT group in BPO efforts.  While this approach has potential risks, EquaTerra asserts that BPO buyers must seek external IT subject matter expertise if they truly feel their IT group cannot provide the needed support, or if the IT group does not step up to the challenge.

Key topics covered in the 2008 “Assessing the Role of IT in BPO Success” market study include:

• Current buyer BPO investments and future investment plans
• Information technology and enterprise software’s perceived role and value to the success of BPO efforts
• The biggest factors impacting BPO success
• The specific attributes IT solutions delivered by the BPO provider that are most critical to BPO success
• Buyer perceptions of leading enterprise software vendors’ exhibited BPO value proposition
• Buyer preferences for enterprise software deployment options in BPO
• The role of the IT group in the BPO process
• Buyer preference for the BPO service providers’ standardized processes and systems

EquaTerra sourcing advisors help clients achieve sustainable value in their IT and business processes. Our advisors average more than 20 years of industry experience and have supported over 2000 transformation and outsourcing projects across more than 60 countries. Supporting clients throughout the Americas, Europe, Middle East, Africa and Asia Pacific, we have deep functional knowledge in Finance and Accounting, HR, IT, Procurement and other critical business processes. EquaTerra helps clients achieve significant cost savings and process improvement with internal transformation, shared services and outsourcing solutions.  For more information, please contact Lee Ann Moore at +1 713.669.9292; leeann.moore@equaterra.com; www.equaterra.com.